Rental properties are one of the best ways to build wealth and make money. To get the best out of your rental property, it’s crucial for you as a landlord to ensure best practices for calculating the rate of return for determining its investment efficacy.
There are several factors to be considered to manage the rental property efficiently. The practices highlighted in this article will ease the process of managing a rental property. Read on to learn about them in detail. Learn more about different insurance products at Surex.
1. Be Professional And Cordial
Maintaining proper interaction with your tenants is crucial for optimal rental property management. Ensure professional, clear, and cordial communication with them.
Follow the lease terms thoroughly. Collect rental arrears and visit your rental property from time to time to ensure its being well-maintained. Also, don’t ignore the repair requests of your tenants.
2. Ensure Fair Practice As Per Housing Laws
Landlords need to comply with the housing laws. But to follow the rules and regulations correctly, you need to have complete knowledge of the practices before renting out your property. So get details of the tenant-landlord laws in your province before preparing the property renting agreement.
3. Be Careful When Screening The Tenants
For optimal maintenance, security, and safety of your property, it’s crucial to find the right tenant. However, if your rental property is competitively priced and in excellent condition, then you are sure to receive calls from several good prospective tenants. Therefore, the screening process should be well-thought-out. Be careful when establishing your requirements for potential tenants. It will help you in finding the right tenant that is both reliable and trustworthy.
Once you shortlist the potential tenants, ask for a written application from them. It should include their necessary income details, rental history, and other relevant information. Next, run a background check so that you can be sure that the details provided by them are authentic. The process will help you find the red flags (if any) for potential renters.
4. Prepare Proper And Detailed Lease Documents
The lease agreement should include everything such as rent price, liabilities of the tenants, etc. It’s a binding contract explaining the roles and responsibilities of tenants and landlords as per the provincial laws. It also explains the conditions under which the agreement can be breached and what consequences may arise.
The lease agreement should feature essential clauses and terms according to the tenant-landlord laws of your province. Elicit the help of a real estate attorney when creating the contract.
- It should also address other items such as parking area rules, lawn maintenance, pest control, pets, subletting, and more.
- Also, include details of the use of the property. Specify whether the property is to be used for renting, living, or business purposes. State the conditions for which tenants can’t use the rental property.
- Plus, include property alteration details such as painting the property’s walls. Landlords that allow property alterations need to mention things like repainting property when moving out, which paint colour they need to use, do the tenants need approval before choosing the paint colour, and other particulars.
Further, explain what may happen if the tenant fails to follow the mentioned rules.
5. Ensure Routine And Timely Maintenance Of Your Property
Specify the care in the lease agreement. State whether the tenant or you (as landlord) will be responsible for the regular maintenance of the property. Set reminders for such tasks and if the tenants are responsible for the upkeep, send them a friendly reminder.
To ensure your rental property is maintained according to your expectations and standards, you may consider providing the tenants with the necessary equipment.
6. Use Reliable Software For Managing Rental Property
Countless property management programs are allowing landlords to manage the rental property virtually. Besides, these programs also help in communicating with the renters and managing repair requests efficiently.
- You can easily find reliable property management software – all thanks to advancing technology. From sending reminders to collecting rent, you can manage everything using the right set of tools and technology.
- You may also sign up for tenant management programs that allow tenants to transfer the rent directly to the bank. Alternatively, you may use apps for seamless transfer of funds (rent).
7. Ask Tenants To Get Renters Insurance
Like property insurance protects the landlord’s interests, renters insurance covers the rights and interests of tenants. You may ask the tenants to get renters insurance for the security of their assets. It protects their valuable items. Also, it will provide you (as landlord) with liability protection.
8. Give Tenants A Sense Of Ownership
Good tenants always expect a sense of ownership. When you find a good tenant, take all necessary steps to keep them. With every renewal of the lease agreement, you may offer to upgrade or replace certain items, especially if the rent will be increasing.
For example, you could add new flooring, repaint, or include a backsplash. The upgrades need not be too expensive; however, they should benefit you and the tenant in the long run. Allow the tenant to choose their item of interest for upgrading or replacement to get a sense of ownership. Plus, it will also give them an impression that their voice is valued and heard.
Endnote
The tips listed above will help you with the effective management of your property. However, note that effectively managing a rental property takes time. It will also help you in growing your portfolio.
Stay updated on the changes related to management strategies, tax benefits, or rental laws to elevate your return. Hopefully, the tips listed above will help you avoid the common mistakes and help you become an informed landlord.
